Of all the intractable foreign issues confronting Barack Obama when he came to office, negotiating an end to the Israeli-Palestinian conflict seemed to be a priority. Mr Obama signalled in his first few months that he saw this as a key to improving relations with the Muslim world. He made a symbolic break with the Bush Administration by involving himself in the search for peace from the start. And in a long-heralded speech in Cairo, he went farther than previous presidents in acknowledging Palestinian grievances, the humiliation of more than 40 years of occupation and the legitimate claim to a Palestinian state. He also gave the Israelis a firm promise that he was not about to abandon them or undercut America’s strong alliance, generous aid and international political protection.

But seven months after that speech, peace looks farther away than ever. On the ground, there is bitterness and disillusion, a feeling that Mr Obama has been outsmarted. The hopes that were raised by his words and fresh approach have turned to cynicism. No grievance is any nearer solution: the checkpoints on the West Bank are as intrusive as ever, the Separation Fence cuts farmers from their villages, plans for freer movement, an airport or economic autonomy are thwarted at every turn. And meanwhile, settlements continue apace, as new building on annexed land encircle Jerusalem and existing settlements are expanded by “natural increase”.

The Netanyahu Government promised from the start that it was ready to restart peace talks. It distrusted the new President but knew that early full-frontal opposition was politically risky. And so, given the clear condition laid down by Mr Obama that there should be no new settlements, which he regards as illegal, Mr Netanyahu prevaricated. On visits to Washington, he spoke instead of the threat posed by Iran. He argued that he had no negotiating partner among the Palestinians. He pointed to the continuing threat of violence in Gaza. On all three counts, Mr Netanyahu is right. And he waited until other preoccupations — a healthcare Bill, the economic crisis and especially Afghanistan — distracted the White House and weakened Mr Obama’s authority.

It seemed to work. His refusal to agree to a freeze frustrated George Mitchell, the US special envoy, and led a weary Mahmoud Abbas, the Palestinian President, to announce that he would leave office next year. But instead of protesting, Hillary Clinton, on a visit last month, called Israel’s offer to restrict new settlement building “unprecedented”. There was a palpable sense in Jerusalem that the pressure was off. The Government promptly announced that it was going ahead with plans to build 900 new homes at Gilo, near Jerusalem. And Israeli spokesmen were dispatched to soothe angry Western governments with assurances that this development was not new, was separate from the territories under negotiation, and that anyway Mr Netanyahu has no option but to honour this pledge to his right-wing political allies.

It is a foolish and provocative move that has angered Washington. Mr Obama has little time for casuistry. He called such construction “very dangerous” as it has fuelled Palestinian anger and derailed the hopes for new talks.

Mr Netanyahu appears to believe that the present stalemate is better than a resumption of any peace talks that limit settlements or weaken Israel’s control of the West Bank. Blaming the Palestinians for not resuming talks while demolishing Palestinian homes to make way for settlements will not increase Israel’s security, will not win international support and will further polarise politics in his own divided nation. Mr Netanyahu should think again.